Ukraine close to shale gas deal with Chevron

Government officials in Ukraine sent a draft project agreement to local officials regarding the Olesska shale deal with U.S. energy company Chevron. According to Reuters, if the deal is approved, it will be the second shale gas deal for Ukraine.

Negotiations on the deal wrapped up June 13 and the country is on its way to lining up yet another energy deal with an ExxonMobil-led consortium. The source said Chevron has been discussing the deal with officials in the capital of Kiev for several months regarding exploration in the Olesska field in western Ukraine.

The shale gas project would ease Ukraine's dependence on natural gas supplies from Russia. Ukrainian law requires local officials to sign off on such energy exploration projects. Officials are expected to make a decision between June 18 and 21, Energy Minister Eduard Stavytsky told Reuters.

"I am convinced that we will achieve a positive result and sign this deal in late July or early August," Stavystky said.

Shale reserves in Olesska are estimated to be as much as 1.5 trillion cubic meters. Earlier this year, Ukraine signed a $10 billion production-sharing agreement with Shell for shale gas exploration in the Yuzivska field.

Visit PennEnergy's research area to learn more about the Ukrainian energy report.

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